Federal Court of Australia

QJKY v Minister for Immigration, Citizenship and Multicultural Affairs [2024] FCA 879

ORDERS

THE COURT ORDERS THAT:

1.    The respondents pay the applicant’s costs of the proceeding, to be taxed if not agreed.

2.    The respondents be entitled to set off, against the liability arising under order 1, the whole of the amount that is or becomes payable by the applicant to the first respondent pursuant to order 2 made on 23 March 2021 in Proceeding No. VID616/2020.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

KENNETT J:

1    Leave was granted to discontinue this proceeding, by consent, on 27 May 2024. However, the parties remained at issue as to the costs of the proceeding. Affidavits and written submissions were filed on the question of costs. By agreement of the parties, I have decided the question on the papers.

Background and issues

2    The proceeding was commenced by an originating application filed on 16 April 2024. At that time the applicant, who is a national of Sudan, was in immigration detention. He had been in detention since May 2015, when a visa that he held was cancelled.

3    On 16 March 2021, while in detention, the applicant made an application for a protection visa. The application was refused by a delegate of the first respondent (the Minister) on 14 July 2022. However, on 20 October 2022 the Administrative Appeals Tribunal (the Tribunal) set aside that decision. It remitted the matter to the Minister with a direction that the applicant satisfied the criterion in s 36(2)(a) of the Migration Act 1958 (Cth) (the Act). When he commenced the proceeding (around 18 months after the Tribunal’s decision), the applicant was still waiting to hear from the Minister’s department as to the progress of his visa application.

4    The applicant sought:

(a)    an order in the nature of habeas corpus, requiring his release from detention; and

(b)    mandamus to require the Minister to perform the duty under s 65 of the Act to make a decision on his visa application; and

(c)    declarations of the unlawfulness of his detention and of its unlawfulness since a date in the past to be determined by the Court.

5    The basis of the claim for mandamus does not require any further explanation at this point. The claims for declaratory relief do not add anything to the issues that have been ventilated in respect of costs and can be put to one side.

6    The claim for habeas corpus, as explained by the applicant’s counsel at the first case management hearing on 23 April 2024, was based on the principle established in NZYQ v Minister for Immigration, Citizenship and Multicultural Affairs [2023] HCA 37; 97 ALJR 1005 (NZYQ): that is, the applicant proposed to submit that his detention was not authorised by the Act because there was no real prospect of his removal from Australia becoming practicable in the reasonably foreseeable future. The obvious difference between the situation of the applicant and that of the applicant in NZYQ (and those of all of the persons who have so far obtained relief in the nature of habeas corpus in reliance on NZYQ) was that the applicant had a visa application on foot, so that no officer had any power (or was under any duty) to seek to bring about his removal from Australia under s 198 of the Act. His counsel proposed to submit (in short) that, because the ultimate purpose of immigration detention is (and must be) to ensure that the non-citizen is removed from Australia if they do not succeed in obtaining a visa, the principle in NZYQ should be understood to apply to the detention of an unlawful non-citizen at times when that person is an applicant for a visa even though there is no existing obligation to bring about the person’s removal.

7    Programming orders were made on 23 April 2024 designed to achieve an early hearing on a separate question as to whether the applicant was entitled to the primary relief sought. However, on 1 May 2024 the applicant was granted a protection visa and released from detention. This rendered the final relief sought in the proceeding otiose.

8    In these circumstances the parties agreed that the proceeding should be discontinued. However they were unable to agree as to who should bear the costs of the proceeding. The orders made by consent on 27 May 2024 therefore made provision for submissions to be exchanged on this issue. The applicant’s submissions on costs were due to be filed on 3 June 2024.

9    Separately, the applicant has commenced proceedings against the Commonwealth seeking damages for false imprisonment. This proceeding remains on foot.

10    On 28 May 2024, reasons were published in CZA19 v Commonwealth [2024] FCAFC 66 (CZA19). The circumstances of that case were similar to the present. The applicant had sought habeas corpus or alternatively mandamus to require a decision to be made on his visa application. His entitlement to that relief had been ordered to be decided as a separate question and referred to a Full Court. The Minister’s delegate refused the visa application but granted a bridging visa, leading to the applicant’s release. The Full Court (Mortimer CJ, Perram and Markovic JJ) decided that the applicant should have his costs of the separate question, on the basis that he had obtained “the practical outcome he pursued by way of the separate question”.

11    On 29 May 2024 the solicitors for the respondents sent an email to the applicant’s solicitor asking that no further work be done on the costs submissions, as the respondents were considering their position in the light of CZA19. The applicant’s solicitor did not agree to that course. On 31 May 2024, the respondents’ solicitors sent a letter to the applicant’s solicitor saying that the respondent agreed (without admissions) to pay the applicant’s costs of his mandamus application on a party-party basis. Proposed orders were attached under which the parties would bear their own costs otherwise than in respect of the mandamus application. This “offer” was said to be open for acceptance until 9.00 am on 3 June 2024. If it was not accepted, the respondents reserved their rights to seek a costs order on an indemnity basis or to submit that the applicant should be deprived of his costs from the time of the 29 May email.

12    The applicant’s submissions on costs were filed on 3 June 2024. The applicant sought his costs of the entire proceedings on an indemnity basis.

13    The respondents’ submissions, which were filed on 17 June 2024, contended for orders that:

(a)    in respect of the period up to 9.00 am on 3 June 2024:

(i)    the respondents pay the applicant’s costs in respect of his claim for mandamus;

(ii)    the applicant pay the respondents’ costs in respect of the claim for habeas corpus;

(b)    for the period after 9.00 am on 3 June 2024, the applicant pay the respondents’ costs;

(c)    each party bear their own costs of the costs dispute up to 9.00 am on 3 June 2024 and the applicant pay the respondents’ costs of the dispute thereafter.

14    The respondents filed substantially longer submissions than had been provided for in the relevant orders, as well as an additional affidavit. Their submissions sought leave to do this, which the applicant opposed in his reply submissions. I have taken into account all of the material filed by the respondents, on the basis that the relevant issues were expanded significantly by the publication of reasons in CZA19 and the correspondence between the parties that followed. Had it been sought, I would have granted leave to the respondent to file longer submissions in reply (which he did in any event) and to file additional evidence.

15    There is one further aspect of the background that should be mentioned. An earlier proceeding in this Court between the applicant and the Minister, in which the applicant sought judicial review of a decision by the Tribunal, was dismissed on 23 March 2021 with an order that the applicant pay the Minister’s costs as agreed or taxed (the 2021 costs order): QKJY v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2021] FCA 233. On 23 May 2023 the applicant signed a document headed “Undertaking”, by which he agreed to pay $10,963.75 in full and final satisfaction of that costs liability (the undertaking). There is uncontested evidence that no payment has been made towards satisfaction of that liability.

Resolution

Costs of the proceeding

16    Although orders as to costs are discretionary, and CZA19 therefore does not lay down a principle that is binding in a strict sense, consistency in the exercise of the discretion is clearly desirable. CZA19 was a unanimous decision of three experienced judges of this Court and I should approach this case consistently with it.

17    The facts of CZA19 have been mentioned above. The reasoning of the Full Court (at [5]) is sufficiently brief to be quoted in full.

We are satisfied that the applicant should have his costs of the separate question, as agreed or taxed. That is because as the applicant submits:

(1)     he succeeded in obtaining the practical outcome he pursued by way of the separate question, namely release from immigration detention and a decision on his application for a protection visa. Had the applicant been denied his protection visa application and released prior to commencement of the proceeding or at least prior to further substantive steps having been taken, he would not have been required to advance a case seeking relief including mandamus to compel the executive to perform its duty;

(2)     contrary to the respondents’ contention, there was no agreed fact that as at 1 May 2024 the applicant’s protection visa application “was at the final stage of processing”;

(3)     even if that application was at the “final stage” by the time the parties finalised the statement of agreed facts, there is no evidence as to why the final stage took approximately five weeks to crystallise into a decision, no evidence of what occurred in the intervening period and no evidence of why the decision happened to coincide with the time at which the respondents’ submissions were due to be filed. No notice was given to the applicant of an anticipated time frame for the decision either before or after commencement of the proceeding;

(4)     the circumstances of this case bear some similarity to those in Grant v Secretary Department of Home Affairs [2022] FCA 261 where, after a final hearing but before delivery of judgment, the applicant was granted a visa and the only question to be resolved was that of costs. Justice Murphy awarded costs to the applicant. His Honour did so for two reasons, the first of which concerned a finding (at [20]) that in that case “it [was] possible to say that the applicant would have been substantially successful, had he not been granted the visa”. His Honour found that the case was plainly distinguishable from the decision in Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622. Here, although there was no hearing and the respondents did not file their submissions, it is plain that the applicant would succeed at least in obtaining the relief he sought in para 2 of his originating application, a writ of mandamus directing the Minister to make a decision on his protection visa application. That the Minister, days before the hearing, accepted the inevitable state of affairs takes the case outside of cases such as Lai Qin; and

(5)     the second consideration in Grant was his Honour’s view that although “the relief the applicant sought would have produced a different (and for him, lesser) result than that which he obtained through the grant of a visa”, the application was “in a real sense” about his liberty. The same can be said here.

18    In so far as the applicant sought mandamus, the respondents accept in the light of CZA19 that it is appropriate that they should be ordered to pay the applicant’s costs.

19    While the applicant initially appeared to seek those costs on an indemnity basis, his written submissions in reply appear to accept that an order for costs on the usual party-party basis is appropriate in relation to the claim for mandamus. To the extent that a claim for indemnity costs is pressed, I would reject it.

(a)    The award of costs focuses on the litigation, rather than the facts that form its subject matter, and indemnity costs should therefore (at least ordinarily) be considered as a response to unreasonable behaviour in the conduct of the litigation rather than a way of signalling disapproval of anterior actions: NMFM Property Pty Ltd v Citibank Ltd (No 2) [2001] FCA 480; 109 FCR 77 at [56] (Lindgren J); Graham Barclay Oysters Pty Ltd v Ryan (No 2) [2000] FCA 1220 at [13] (Lee, Lindgren and Kiefel JJ). The reasons why the resolution of the applicant’s protection visa application took what appears at first blush to be an inordinately long time have, in any event, not been the subject of evidence let alone findings.

(b)    The respondents’ conduct of the proceeding has not been shown to be out of the ordinary. When the grant of a visa rendered the claim for mandamus otiose, the proceeding had been on foot for approximately two weeks and one week had passed since the first case management hearing. The respondents’ evidence was due to be filed two days later. While the respondents should have sought amendments to the timetable at that point, the decision not to file evidence on issues that had become moot was understandable. There is no evidence of delay on the respondents’ side or of any prolonging of the proceeding despite consciousness that they were defending a hopeless position. If it be the case that the decision to grant the visa was accelerated by the commencement of the proceeding and an appreciation that mandamus was likely to be ordered, that suggests an appropriate response to the litigation on the part of the respondents’ officers rather than an inappropriate one.

20    In so far as the applicant sought habeas corpus, I do not accept the submission of the respondents that the application was bound to fail (and that this aspect of the case therefore comes within one of the exceptions, identified in Lai Qin at 624-625, to the general proposition that there should be no order as to costs if there has not been a hearing on the merits).

(a)    It is true that (as recited in NZYQ at [31]) the “legitimate and non-punitive purposes” for which a non-citizen can be detained have often been “identified in terms of removing the alien from Australia or enabling an application by the alien for permission to remain in Australia to be made and considered”. However, there is a coherent argument to the effect that, where a person is detained in order to separate them from the Australian community pending a decision as to whether they are to be allowed to remain in Australia, that is a legitimate purpose only on the footing that the person can be removed if permission to remain is refused. Thus, it was observed in Plaintiff S4/2014 v Minister for Immigration and Border Protection [2014] HCA 34; 253 CLR 219 at [33] (French CJ, Hayne, Crennan, Kiefel and Keane JJ) that the lawful detention of a non-citizen under the Act was “ultimately bounded” by the requirement to effect their removal because this was the terminating event that, “all else failing, must occur”. These observations were referred to in Commonwealth v AJL20 [2021] HCA 21; 273 CLR 43 at [27]-[28] (Kiefel CJ, Gageler, Keane and Steward JJ) as explaining the basis upon which detention under ss 189 and 196 of the Act is lawful. These statements cohere with how the power to authorise executive detention was described in Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1 at 32 (Brennan, Deane and Dawson JJ). It might be thought to follow that the principle recently established by NZYQ, as to the absence of a “legitimate and non-punitive purpose” for detention when the “ultimate” purpose of removal is incapable of fulfilment, has work to do when a non-citizen is detained pending a decision on a visa application.

(b)    This is not an appropriate occasion to determine the issue and I should not be taken to be expressing a view as to what is the correct position. The issue arises squarely in two cases that had been listed for hearing before a Full Court but have now been removed into the High Court: CZA19 v Commonwealth (M66/2024) and DBD24 v Minister for Immigration, Citizenship and Multicultural Affairs (P29/2024). It will also arise in the separate proceeding in which the present applicant seeks damages. I merely observe that it is possible to construct a coherent argument in favour of the applicant’s position and the claim for habeas corpus should therefore not be regarded as having been bound to fail.

21    Nor, however, would I accept that the claim for habeas corpus obviously had such strong prospects as to call for a specific award of costs in the applicant’s favour on this issue, let alone on an indemnity basis.

22    The issue that therefore arises is whether, for the purposes of making orders on costs, the case should be disaggregated into its two component claims or treated as a single dispute. The court in CZA19 took the latter approach (although it is not clear from the reasons whether the Court was asked to deal with the costs of mandamus and habeas corpus separately). The two forms of relief sought in the present case are, if anything, more closely connected in terms of practical outcomes than was the case in CZA19.

(a)    There, the decision which the applicant had sought to compel by mandamus was made adversely to him. A delegate then made a separate decision (not the subject of any proceedings) to grant the applicant a bridging visa; and it was that grant that resulted in his release from detention. It was this combination of decisions that the Full Court regarded as aligning with the “practical outcome” that the applicant sought.

(b)    Here, the decision that the applicant sought to compel by mandamus was made favourably to him. It was the direct cause of his release from detention and thus rendered both prayers for relief otiose. The achievement of the “practical result” sought by the applicant thus flowed directly from the Minister doing part of what he was seeking to compel the respondents to do.

23    Although determination of the claims for mandamus and habeas corpus would to some extent have involved distinct bodies of evidence, the claims were connected and in my view should be treated as parts of a single dispute for costs purposes. The case might take on a different complexion if costs were being decided following a final hearing in which the parties had been put to significant expense in assembling and adducing evidence, and the particular evidence relevant to each claim could be concretely identified. However, as a general rule applications regarding costs on an issue by issue basis should not be encouraged: see the cases cited in Fairfield Pastoral Holdings Pty Ltd v Van Niekerk (No 2) [2024] FCA 61 at [9]-[10], [15].

24    Accordingly, subject to the further issues addressed below, the appropriate order is that the respondents pay the applicant’s costs of the proceeding, as agreed or assessed on the usual basis.

The offer to settle the costs issue

25    The respondents sought an order that the applicant pay their costs of the proceeding after 9.00 am on 3 June 2024 (costs which, so far as I am aware, relate entirely to the costs issue), or alternatively an order depriving the applicant of his costs arising after that time, on the basis that they had made an offer to compromise the issue of costs which the applicant did not accept.

26    This issue does not require determination, because the applicant has achieved a better outcome than acceptance of the offer would have given him. On that basis he is justified in not agreeing to the proposed settlement.

27    Even if this were not the case, I would be reluctant to embark on consideration of whether the applicant’s rejection of the offer justified a special costs order dealing, in substance, with the costs of arguing about costs. In a long case which had generated significant costs, the uncomfortably recursive nature of such an exercise might be able to be ignored. Here, in a case that was discontinued by consent less than 6 weeks after being commenced (and with no evidence on the substantive issues having been filed), the exercise is out of proportion to the task of arriving at an appropriate costs order.

28    There is not a sufficient justification for treating the question of costs as a separate issue and making it the subject of a separate order. The further costs generated by the costs issue (as to which the applicant has been substantially, although not wholly, successful) should be treated as part of the costs of the proceedings.

Set-off

29    The respondents also sought an order that they be entitled to set off, against any liability to pay costs in the present case, the liability of the applicant pursuant to the 2021 costs order.

30    The power to order a set-off of costs orders when it is equitable to do so has been recognised as part of the Court’s “inherent jurisdiction over its suitors” (eg Huang v Deputy Commissioner of Taxation (No 2) [2020] FCAFC 160 at [15]). Exercise of that power can assist in circumstances where ordinary principles relating to set-off under the general law might not apply (eg where there is not precise identity of parties) (see Aristocrat Technologies Australia Pty Ltd v Allam [2017] FCA 812 at [11]-[14] (Perram J) (Aristocrat)).

31    The starting point is that the 2021 costs order should not be treated as optional. The applicant cannot expect reimbursement out of the public purse in respect of the present proceedings while his liability to reimburse one of the present respondents arising out of an earlier proceeding, in which he was unsuccessful, goes unmet. To put it another way, the Minister has the same right not to be left out of pocket in relation to the earlier proceeding (where the applicant failed) as the applicant does in relation to this proceeding.

32    The applicant sought to resist an order for set-off on two bases.

33    First, he submitted that the undertaking did not have effect as a deed and therefore no liability had crystallised pursuant to the 2021 costs order. This was said to stand in the way of any set-off.

34    The 2021 costs order was an order of a superior court that the applicant pay the Minister’s costs “to be taxed if not agreed”. The order created a liability in an unliquidated amount. However, as Perram J held in Aristocrat at [12], whether the amounts in question are liquidated or not is not a barrier to an order for set-off being made in the exercise of the Court’s discretion. The question is not whether there are liabilities upon which ordinary principles of set-off can operate but what order is within the power of the Court and appropriate to the circumstances of the case. Nothing in principle prevents the Court from ordering that the parties are to set off two identified monetary obligations notwithstanding that one or both of them is unliquidated at the time of the order.

35    I add that I do not regard the execution of a deed as necessary in order to crystallise a liability pursuant to the 2021 costs order. The applicant was ordered to pay the Minister’s costs “to be taxed if not agreed”. An agreement in fact between the parties as to the amount of those costs would be sufficient to crystallise a liability in that amount. However, the undertaking which is in evidence is not signed by anybody on behalf of the Minister. There is no evidence that the Minister agreed to accept the amount referred to in the document in satisfaction of the applicant’s costs liability. I am therefore not in a position to treat it as an agreement as to the amount of costs for the purposes of the 2021 costs order. Nevertheless, for the reasons outlined in the previous paragraph, this does not prevent an order for set-off being made.

36    Secondly, the applicant submitted that the respondents were detaining him unlawfully and should not be permitted to escape the consequences of doing so. For three reasons, this submission must be rejected.

(a)    There has been no hearing on the substantive issues in the case. It would not be appropriate to proceed on the basis that any particular findings would have been made (cf Lai Qin at 626).

(b)    The purpose of a costs order is to reduce the financial burden of litigation on the successful party (and sometimes to sanction unreasonable conduct in the course of the litigation). It is not to penalise wrongful conduct that is observed in the events leading up to and forming the subject of the litigation. Here, the applicant has on foot a claim for damages based on the alleged illegality of his detention. That is the proper forum for determination of whether (and for what period) his detention was unlawful and, if so, what order should be made against those who detained him as a consequence.

(c)    An order for set-off will not allow the respondents to escape from the litigation scot free. It will leave the Minister unable, in whole or in part (depending on the final amounts of the respective liabilities), to proceed against the applicant under the 2021 costs order.

37    The circumstances of the applicant indicate a possibility that he lacks the resources to pay his solicitors and counsel. It may be, therefore, that it is their interests (rather than those of the applicant himself) that are most affected by making an order for set-off. The Court is significantly assisted by the efforts of practitioners who take on cases such as this one despite the risk of receiving no payment for those efforts. However, no evidence or argument has been directed to this point. I have therefore treated the question of set-off as one involving issues of fairness as between the applicant and the respondents.

38    For these reasons an order should be made permitting the respondents to set off the costs of this proceeding against the costs ordered to be paid by the 2021 costs order.

Disposition

39    The respondents should be ordered to pay the applicant’s costs of the whole proceeding, assessed on a party-party basis if not agreed. However, the respondents should be permitted to set off their liability pursuant to that order against the applicant’s liability under the 2021 costs order.

Associate:

Dated:    7 August 2024